USD/JPY hits 2-week tops, bulls eyeing a move beyond 114.00 handle

   “¢   The risk-on mood continues to weigh on JPY and remains supportive.
   “¢   A subdued USD price action fails to provide any additional boost.
   “¢   Revised US GDP print/Powell’s speech eyed for some fresh impetus.

The USD/JPY pair built on this week’s strong up-move and climbed to the 114.00 neighborhood, or two-week tops, in the last hour.

The pair continued gaining some positive traction for the third consecutive session and remained supported by the prevalent risk-on mood, which tends to undermine the Japanese Yen’s safe-haven demand.

Meanwhile, a subdued US Dollar price action did little to provide any meaningful boost and thus, kept a lid on any strong follow-through up-move, at least for the time being.

With investors looking past overnight hawkish comments by the Fed Vice Chair Richard Clarida, the greenback was seen consolidating gains near two-week tops ahead of today’s important data/event.

Market participants will look forward to the preliminary release (second estimate) of the US Q3 GDP growth figures, due later during the early North-American session, for some short-term trading impetus.

The key focus, however, will be on the Fed Chair Jerome Powell’s scheduled speech, which will be looked upon for fresh clues over the central bank’s monetary policy outlook beyond 2018.

This coupled with the latest FOMC meeting minutes, scheduled for release on Thursday, will now play an important role in determining the pair’s next leg of directional move.

Technical outlook

Omkar Godbole, Analyst and editor at FXStreet writes, “114.08 – the upper edge of the symmetrical triangle – is the level to beat for the dollar bulls. A break above that level could happen today if Powell sounds less dovish and the US Q3 GDP prints above estimates, validating the Fed’s gradual path of tightening. The bull breakout, if confirmed, would open the doors to 115.00.”

“The breakout, however, would remain elusive if the US Q3 GDP is revised lower significantly, forcing markets to price in a rate pause in 2019. Add to that dovish Powell and the USD/JPY could test the lower end of the triangle, currently at 112.63,” he added further.